Honda is creating new small crossover segment with Urban SUV

Article by Anita Panait, on January 22, 2013

The small crossover segment currently does not exist. However, in mid-2014, Honda would be creating the segment by fielding the first small crossover ever. Honda is planning to build a crossover based on its Fit subcompact and is expected to dominate the still-to-be-seen crossover segment for years, until the carmaker’s rivals decide to field in their own entries as evidenced by their wait-and-see attitude.

Honda practically announced to the world that it would barge into a new segment by unveiling the Urban sports utility vehicle concept at the Detroit Auto Show. The Urban measures around 169.3 inches long, making it 9 inches shorter than the Honda CR-V and giving it a limited cargo capacity. Honda, however, plans to address this by using the Fit's fold-flat "Magic Seats" and by placing the fuel tank under the front seats.

It is expected that Honda will have the production version of the Urban come after the redesigned Fit in the U.S. introduction cycle. Honda will roll out the Fit in early 2014, and the crossover will arrive later in the mid-year. The carmaker will produce both the Fit and the Urban at its Celaya plant in Mexico, which initially could produce up to 200,000 units annually. Since Honda is targeting tech-savvy yet budget-minded young buyers for the Urban, the carmaker needs to feature more content.

However, Honda needs to make sure that Urban would not cannibalize CR-V sales, according to industry executives. But, as of now, the Urban is creating a buzz among other carmakers. For instance, Jim Lentz, chief executive of Toyota Motor Sales U.S.A., remarked that they are looking at the small crossover segment to determine if there is “a piece of that iceberg that breaks off and turns into a developing segment.”

However, months ago, Toyota said it was not interested in building a crossover beneath the RAV4. The small crossover segment might go the same way as the subcompact one that took off in the US six years ago with the introduction of the Fit, Nissan Versa and Toyota Yaris.

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